McKesson at Morgan Stanley conference: outlook rises on oncology push

On Monday, September 14, 2026, McKesson (MCK) utilized the Morgan Stanley 24th Annual Global Healthcare Conference to present a more optimistic earnings outlook, consistent operating progress, and a deeper engagement in oncology and biopharma services. The corporation also highlighted some challenges within its Medsurg division and pointed out several policy and contract issues that require monitoring.

In its full-year 2027 adjusted earnings per share guidance, McKesson raised its range by $0.40, now projected between $44.20 and $45.00. Each of the four reportable segments experienced double-digit growth in the first quarter. The company finalized a $2.5 billion share repurchase program, which constitutes 50% of the intended $5 billion share buyback, and increased its dividend by 15% in July. Management stated that the planned separation of Wellverse is set to potentially go public in the second half of 2027.

McKesson’s latest quarter showcased robust performance across various business segments, with the largest segment and its oncology-related operations driving the growth. The company’s full-year 2027 EPS guidance of $44.20 to $45.00, an increase of $0.40 from the previous range, implies 13% to 15% growth on a reported basis. Normalized growth, excluding the Norway exit and the US Oncology gain on sale, would be 15% to 17%, slightly above McKesson's long-term target of 13% to 16% EPS growth.

In the North American Pharmaceutical segment, constituting roughly 80% to 85% of the company's revenue and over half of its profit, McKesson reported a 5% increase in the top line during the quarter. It also achieved a 19% year-over-year adjusted operating income growth, raising its guidance toward the upper end of the previous 5.5% to 9.5% range. This segment benefited from specialty growth, stable prescription usage, and broader customer channel diversification, including healthcare systems and specialty channels.

Valuation-wise, McKesson trades at a P/E ratio of 23.48 and a PEG ratio of 0.45, indicating that the stock is priced at a relatively low multiple considering its growth prospects. InvestingPro analysis supports the valuation, suggesting that the company appears undervalued. Investors interested in further insights can access a more in-depth analysis through InvestingPro, which provides over 10 exclusive tips for MCK, along with advanced financial metrics and expert analysis.

McKesson's Oncology and Multispecialty segment exhibited the strongest growth in the quarter, reporting a 33% top-line growth and a 41% increase in adjusted operating profit. The segment contributed about 15% organic adjusted operating profit growth, excluding the prior-year Core Ventures acquisition. The Rx Transaction Services business continued expanding, with a 9% top-line growth and a 13% increase in adjusted operating profit.

Full-year guidance for these segments remains 11% to 15% adjusted operating profit growth, with the quarter's performance near the midpoint. McKesson’s Medsurg business, which will merge with Wellverse, experienced 4% top-line growth. However, its adjusted operating profit declined by approximately 20% from the previous year due to product mix shifts and one-time administrative costs.

The decline can be attributed to product mix changes and one-time administrative costs tied to the Medsurg segment.